SAP Excellence. Series editors: Prof. Dr. Dr. h.c. Peter Mertens Universitat Erlangen -Niirnberg. Dr. Peter Zencke, SAP AG, Walldorf

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1 SAP Excellence Series editors: Prof. Dr. Dr. h.c. Peter Mertens Universitat Erlangen -Niirnberg Dr. Peter Zencke, SAP AG, Walldorf

2 Springer-Verlag Berlin Heidelberg GmbH

3 Peter Buxmann Wolfgang Konig Inter-organizational Cooperation with SAP Systems Perspectives on Logistics and Service Mana~ement With 92 Figures and 1 Table, Springer

4 Prof. Dr. Peter Buxmann Technical University of Freiberg Chair of Information Management Lessingstrasse Freiberg Germany prof. Dr. Wolfgang Konig University of Frankfurt Institute of Information Systems Mertonstrasse 17 D Frankfurt Germany ISBN ISBN (ebook) DOI / Library of Congress Cataloging-in-Publication Data Die Deutsche Bibliothek - CIP-Einheitsaufnahme Buxmann, Peter: Inter-organizational Cooperation with SAP Systems: Perspectives on Logistics and Service Management; with 1 table 1 Peter Buxmann; Wolfgang Konig. - Berlin; Heidelberg; New York; Barcelona; Hong Kong; London; Milan; Paris; Singapore; Tokyo: Springer, 2000 (SAP Excellence) This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer-Verlag. Violations are liable for prosecution under the German Copyright Law. Springer-Verlag Berlin Heidelberg 2000 Originally published by Springer-Verlag Berlin Heidelberg New York in 2000 Softcover reprint of the hardcover 1 st edition 2000 The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Hardcover-Design: Erich Kirchner, Heidelberg SPIN / Printed On acid-free paper

5 Preface The formation of inter-organizational cooperation is increasingly used to improve the partners' competitive position in a global world economy. This tendency in logistics occurs when members of a supply chain become partners: suppliers, manufacturers, logistics service providers, and finally the end-customers. Supply chain management attempts to optimize the flows of goods and information between companies. Logistics service companies play an increasingly important role in the supply chain. Their task here is no longer restricted to just providing basic logistics services such as transport, warehousing and transshipment. Rather, logistics service providers are increasingly becoming complete providers of service and information. For example, they provide basic services, such as financing for inventory or offer after-sales services. Because of the fundamental importance of the exchange of information for the coordination of the supply chain, logistics service companies are also increasingly becoming information and communications systems specialists. To support logistics processes, SAP provides various systems for the parties in the supply chain. These include modules for the logistics functions in the Rl3 System, such as sales and distribution (SD module) and materials management (MM module), and EDI and Workflow Management to link companies using the Internet. In addition, SAP provides various components to optimize the supply chain. This book concentrates on the business processes linking companies and investigates the opportunities and limits on the use of SAP systems. This book compares the known task requirements to the SAP methodology. Special attention is paid to how SAP supports the function oflogistics service providers. Although this book aims to provide a practical presentation of these concepts and solutions, it does not ignore the scientific foundation. Whereas Chapters I and 2 concentrate on providing a compact representation of the available method

6 VI Preface knowledge, Chapters 3 to 6 show solutions based on SAP systems. The practical orientation is enhanced by the inclusion of case studies: The Schenker Logistics case shows how logistics service providers are increasingly changing to become complete service providers and specialists in the provision and use of information and communications systems (Chapter 7). We use the example of Goodyear to show how modern information and communications systems can support the coordination of logistics between companies (Chapter 8). The use of SAP Rl3 and the Supply Chain Management Initiative are discussed in both cases. This book belongs to the SAP Excellence series, which initially contains the following works: Appelrath, Hans-Jiirgen; Ritter, Jorg: SAP Rl3 Implementation. Methods and Tools Becker, Jorg; Uhr, Wolfgang; Vering, Oliver: Retail Information Systems Based on SAP Products Buxmann, Peter; Konig, Wolfgang: Inter-organizational Cooperation with SAP Systems. Perspectives on Logistics and Service Management Knolmayer, Gerhard; Mertens, Peter; Zeier, Alexander: Supply Chain Management Based on SAP Systems. Order Processing in Manufacturing Companies A feature of all these works, and thus also this book, is that employees of SAP have recently validated all statements made about the software. We have created under a discussion forum to exchange experience gained with the use of SAP systems for the cooperation between companies and, in particular, for the supply chain management. We hope that our readers actively participate in the discussion forum. Finally, we would like to express our thanks to a number of people who supported us in many ways in the production of this book. These include Prof Peter Mertens and Dr. Peter Zencke, the initiators of the SAP Excellence series, and Dr. Franz Hollich, our central contact partner at SAP AG. We also thank our partners for the practical examples, Dr. Joachim Klein and Bernhard Oymann at Schenker Logistics, Jiirgen Herb at Goodyear, and many employees from SAP for their exemplary cooperation. Last but not least, Markus Fricke, Sven Grolik and Claus Hittmeyer, all employees at the Institute for Information Management, earn our grateful thanks for their valuable support in preparing notes for this book. Moreover, we would like to thank Anthony Rudd for translating the manuscript. Peter Buxmann Wolfgang Konig

7 Table of Contents Chapter 1 The Use of Information and Communications Technology to Support Cooperation Between Organizations in Logistics l 1.1 Forms and Motives of Building Cooperation ) 1.2 Inter-Organizational cooperation in Logistics ) 1.3 Development Stages in Information and Communication Technology Development Phases in Logistics 7 Chapter 2 Inter-Organizational Processes and Cooperation in Logistics Networks Principles of Materials Logistics Subfunctions for Procurement Logistics and Distribution Logistics Transport Chains and Transport Networks Planning and Optimization Concepts in Materials Logistics Principles of the Information Logistics The Connection between Information and Materials Logistics Information-logistical Infrastructure Electronic Commerce in the Supply Chain )4

8 VIII Table of Contents Security in Information and Communications Networks Standardization and Network Effects Supply Chain Management - Specification and Monitoring of Logistics Networks Principles of the Supply Chain Management Concepts and Instruments of the Supply Chain Management Problems with the Control of Supply Chains Problems with the "Coopetition" of Companies Modem Tasks for Logistics Service Providers in the Supply Chain From Logistics Service to Logistics System Service Service Management as Modem Task Area for Logistics Service Providers The Logistics Service Provider as Supply Chain Manager Supply Chain Management Systems Chapter 3 mysap.com mysap.com Marketplace mysap.com Workplaces mysap.com Components and Business Scenarios mysap.com Application Hosting mysap.com Internet Business Framework Chapter 4 Support of Inter-Organizational Logistics Processes with the SAP R13 System SAP R13 in the Logistics: Overview MM Module Functions SD Module Functions... 72

9 Table of Contents IX 4.4 SM Module Functions 74 4_5 The Customer Relationship Management-Initiative of SAP 76 4_5_1 SAP Marketing 76 4_5_2 SAP Sales 76 4_5_3 SAP Service Architecture and Connection of Mobile Components 78 4_6 Electronic Data Interchange 79 4_6_1 Principles and Potential Use 79 4_6_2 ED! with SAP R/3: Possibilities and Limitations 81 Chapter 5 Internet Basic Technologies with SAP Systems _1 Principles of the SAP Business Framework: Business Components, Business Objects and BAPIs 84 5_2 SAP R/3 Internet Application Components 85 5_2_1 The Internet Application Components Concept Applications on the Basis of the SAP R/3 Internet Application Components Electronic Commerce with SAP R/3: The FAG Kugelfischer Sample Application Internet Application Components - An Assessment ED! over the Internet 95 Chapter 6 New SAP Systems to Support Supply Chain Management 99 6_1 SAP Advanced Planner and Optimizer (APO) 99 6_1.1 Overview _2 APO Solver 101 6_ 1.3 The Supply Chain Cockpit. 101

10 x Table o(contents APO Planning Module SAP Logistics Execution System (LESL Overview SAP LES Warehouse Management System SAP LES Transportation Management System SAP Business Information Warehouse (BWL lll Overview III The Creation of a Data Basis for the Business Information Warehouse Possibilities for Support of the Decision-making Process SAP Business-to-Business Procurement Overview The Procurement Process with SAP Business-to-Business Procurement New SAP Systems: Status quo, Experience of the Use and Perspectives 121 Chapter 7 Schenker Logistics Services Case Studies: Management of a Supply Chain for Automobile Manufacturing Overseas Management ofa Supply Chain for Automobile Manufacturing Overseas - Status quo Overview of the Case Study Management of the Processes to Supply the Consolidation Center in Bremerhaven Management of the Processes from the Goods Receipt in the CC Bremerhaven Through to the Loading in the Shipping Harbor Management of the Processes from Loading Through to the Goods Receipt at the Deconsolidation Center in Brazil 134

11 Table o{contents XI Management of the Processes from the Transition of the Containers in the Warehouse Through the Delivery at the Factory Overall Summary of the Information-based Logistics Infrastructure Business Information Warehouse Perspective: Inventory Information in the Supply Chain Chapter 8 Goodyear Case Study: Use of SAP Systems for Supply Chain Management APO Task Use of APO Components SAP APO - An Assessment Support for Logistics Processes Using the SAP Logistics Execution System Initial Situation and Task Transport Management with LES Order Picking with LES SAP LES - An Assessment Use of the SAP Business Information Warehouse at Goodyear Abbreviations 173 Bibliography Index